New Zealand's unemployment rate has climbed to its highest level since the so-called "winter of discontent" in 2000 as firms continue to struggle with the fall-out of the global financial crisis which has pushed up joblessness for seven straight quarters.
The unemployment rate rose to a seasonally adjusted 6.5 per
cent in the latest Household Labour Force Survey released by Statistics New Zealand, the highest level since the March 2000 quarter.
Some 150,000 people are out of work and looking for jobs - that's the most since March 1994. Still, it could've been worse if companies hadn't decided to sacrifice profits to retain staff, according to Finance Minister Bill English, who is picking the unemployment rate to reach a peak around 7 per cent next year.
"I think the numbers are telling us that businesses have made smaller profits and bigger losses than probably was expected through this recession," he said in an interview on Radio New Zealand.
"Some of them have held on to their employees even though they were losing money because they didn't want to lose skilled people that they worked pretty hard to find in the last few years."
Participation in the labour force fell to 68 per cent in the September quarter from 68.4 per cent, while the number of people officially unemployed, available but not seeking work or actively seeking but not available to work rose to 254,000 from 236,100 in the previous quarter.
Short-term unemployment, people out of work for 26 weeks or fewer, increased 37 per cent to 96,700, and the number of long-term unemployed, people out of work for more than 26 weeks, more than doubled to 35,500.
The kiwi dollar fell to 72.33 US cents from 72.54 cents immediately before the release.
ASB chief economist Nick Tuffley said the employment rate was weaker than expected, and softer than the signs implied in business survey stabilisation. "The lower than expected labour participation rate and higher than expected unemployment rate are roughly what you would expect to see given the extent of the decline in employment," he said in a report.
Rising unemployment has become a global problem following the collapse of financial markets last year which saw synchronised recessions in Japan, Europe and the U.S.
American unemployment is expected to have increased to 9.9 per cent last month from 9.8 per cent as the world's largest economy struggles to reinvigorate itself.
Social Development and Employment Minister Paula Bennett issued a statement saying that today's unemployment numbers were "in line with what was expected."
"Yes, New Zealand has come out of recession - just. But unemployment tends to lag behind an economy getting back on its feet. Recent forecasts though have unemployment peaking closer to 7 per cent, instead of the 8 per cent forecast in the Budget.
"We've also seen a drop in the number of people requiring an Unemployment Benefit. For the month of October, the total number dropped below 60,000, to 59,955. In September, 60,600 were on the unemployment benefit."
An investment in 300 more frontline staff at Work and Income had made a difference in helping people find work, said Bennett.
She said "the rate at which people coming through their doors leave without needing a benefit has risen to over 40 per cent last week".
In September the youth benefit numbers were 19,845, said Bennett, but today's October benefit figures showed youth 19,461 young people between 15 and 24 were on an unemployment benefit.
The percentage of working age people on an unemployment benefit was 2.1 per cent in New Zealand, compared to Australia's 4.5 per cent using the latest available data, said Bennett.
Council of Trade Unions secretary Peter Conway said that now would be a good time for the Government to increase funding for skills training for those unemployed seeking a job.
"The Skills Investment Fund already exists and could do with a top up to make it easier for unemployed workers to get work," he said.
Conway said that recent unemployment benefit statistics showed a slight dip below 60,000 but this was well up on 17,700 from mid 2008.
M?ori unemployment was at 14.2 per cent, Pacific people at 12.3 per cent and youth unemployment (15-19 years) is at 25.1 per cent.
"For all the talk that the recession is over, this shows that unemployed workers are continuing to bear the brunt of a recession caused by the global financial crisis."
"More needs to be done to assist these workers," said Conway.
